Steel Products Prices North America
SMU HR Index at 7-Year Low
Written by John Packard
November 12, 2015
Earlier this week, Steel Market Update adjusted our benchmark hot rolled coil (HRC) index to reflect the average pricing we have been seeing as of the beginning of this week. We reported our average as being $380 per ton ($19.00/cwt) which also happens to be the lowest hot rolled price seen during the height of the Great Recession in 2009.
We thought our readers would be interested in seeing the path taken by hot rolled steel since the beginning of 2009 until today. What we find fascinating is the power of the jump in pricing since June 9, 2009 when it bottomed at $380 per ton. We saw prices jump almost to $900 per ton between then and early 2011.
Looking at the current market cycle which essentially began in early 2013, the peak of the cycle was achieved the week of May 20, 2014 when prices hit $675 per ton ($33.75/cwt). We began 2015 at $600 per ton ($30.00/cwt) and we have fallen almost non-stop since then with the exception of a short “dead cat bounce” between April 28 and July 14 of this year.
During this almost seven year process the average price for hot rolled coil was $609 per ton ($30.45/cwt).
Why are we at these kinds of levels?
In 2009 the issue was a massive erosion of demand (and confidence) which resulted in excessive inventories that had to be worked off.
Over the past couple of years, the U.S. market place has seen the highest steel prices in the world which attracted other countries to ship their excess steel to the United States. This resulted in a glut of supply and inventories growing out of control. During the 2nd half 2015 we also saw a slowing of demand which has also exacerbated the inventory situation. However, the slowdown in demand is no where near what it was during the 1st half 2009.
SMU Note: Can prices go lower from here – yes. How much lower is anyone’s guess but buyers may want to review the above graphic, read Spencer Johnson’s HRC futures article in tonight’s edition and review your own records of past price negotiations to determine if now is a good time to buy for next year…
John Packard
Read more from John PackardLatest in Steel Products Prices North America
CRU: Longs pricing trends diverge in North, South America
Most longs prices in the US were unchanged this month, except for rebar, which declined by $1.50/cwt ($30/short ton) m/m. While end-use demand is stable, inventories are well-stocked, keeping purchases limited. Domestic availability is sufficient to meet current demand, hindering the appetite for imported material. Meanwhile, prices for scrap remained under pressure in June, with […]
Nucor cuts plate prices by $125/ton, cites ongoing competition
Nucor Corp. announced that its plate mill group would cut prices for as-rolled, discrete, and normalized plate with the opening of its August order book.
Nucor cuts HR price for fourth straight week
Nucor lowered its consumer spot price (CSP) for hot-rolled (HR) coil by another $10 per short ton (st) for the first week of July. The steelmaker said in a letter to customers on Monday that its CSP base price for the week will be $670/st for all of its sheet mills with the exception of California Steel Industries (CSI).
Cliffs sets $720/ton HR price with opening of August books
Cleveland-Cliffs on Tuesday announced its monthly hot-rolled (HR) coil price of $720 per short ton (st) with the official opening of its August order book. The rate is down from last month’s price of $800/st.
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]